Earnings Preview: Western Digital

Western Digital (WDC) is expected to report Q1 earnings after the market close on Thursday, October 22, with a conference call scheduled for 5:00 pm ET.

Guidance

Street estimates for Western Digital are diverse. The consensus mean EPS estimate is 94c, with the range being 80c-$1.13. The consensus mean for revenue is $2.06B, with the range being $1.94B-$2.20B, according to First Call. Guidance from Western Digital management is for Q1 EPS of 75c-82c.

Analyst Views

Stifel believes Western Digital will post solid upside to its September Q1 results. The firm estimates Q1 at 84c and $2.04B in revenue. The firm believes the sentiment is that Q1 results could be as high as $1.00. Looking forward: Stifel's Q2 revenue estimate stands at $2.04B, vs. a consensus range of $2.04B-$2.32B, and company guidance of $1.9-$2.0B. While Stifel's gross margin estimate comes in at 19%, it could still see upside potential. Stifel's operating expense estimate remains unchanged at $175M, in-line with guidance. The firm's non-GAAP EPS estimate equates to 84c, vs. guidance of 75c-82c, though a 21% gross margin would equate to EPS upside to as high as $1.00. Stifel downgraded its rating on Western Digital on Oct.15 to Hold on a price basis.